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Summary:

Berg Insight believes mobile content companies are going to figure out how to monetize mobile traffic. Berg’s analysts predict that ads and marketing won’t just become a much bigger part of the online ad market, but also a sizable segment across all advertising.

Mobile advertising
photo: GigaOM

Mobile ads may be a tough market to crack today, but the analysts at Berg Insight believe it will get sorted out — and in a big way. It estimates that in 2017 4.4 percent of the total global ad spend across all media will be targeted at the phone screen.

We’re not just talking about digital advertising — Berg estimates mobile will be 15.5 percent of the total online ad spend. Rather, we’re talking 4.4 percent of all ads, whether they’re shown on TV, staring at you from a billboard or embedded in a website. What’s more, Berg said it was careful how it quantified “mobile.” Ads you view on tablets or other optimized browsing devices don’t count. This would be strictly adverting and marketing that appears on the mobile phone.

In real numbers, Berg estimated that mobile ads and marketing comprised a €3.8 billion (U.S. $5 billion) market in 2011, dominated by Google’s AdMob and Apple’s iAd platforms. But Berg is predicting that number will grow by a factor of five into a €19.7 billion market in 2017.

“Consumers are currently devoting a quarter of their media consumption time on mobile devices, yet the channel only attracts slightly more than 1 percent of the ad dollars,” Berg Insight Telecom Analyst Rickard Andersson said in a statement.

Of course, five years is a long ways out, and the track record on such long-term prognostication is mixed. But if Berg is right, that’s only good news to a company like Facebook which has found of its traffic and customers moving to mobile platforms but only recently began advertising on the phone.

  1. I think Berg’s estimates for mobile ads and marketing will be shown to have been much too conservative in the long run. Look at the mobile ad market’s growth in the last twelve months. AdMob and iAd are referenced here, but look at other ad networks like Leadbolt, Airpush, etc. The amount of revenue being generated by advertisers and developers today is so powerful that these individuals are going to dedicate even more time, money, and energy into the industry, which will fuel growth at a rate much, much faster than anything we’ve seen or could expect. Another factor we have to consider is innovation in the mobile ad arena. Six months ago, as one example, Airpush’s SDK 5.0 wasn’t here. Today, it’s responsible for industry leading CPMs. If one ad network can start to prove itself to be superior in this competitive field almost overnight, who knows where we will be in another five years. It’s impossible to predict. But it’s exciting to consider the possibilities, I will definitely tell you that!

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    1. Hi Rebecca,

      Taking you comments at face value (sorry, we get a lot of Airpush promotional comments on these boards), I think you can’t use AirPush as a predicator of growth. Airpush ads are basically spam bordering on malware. They may be doing well now, but I think there is limit to their upside. The more devs that use Airpush, the more cluttered notification bars will become with ads that consumers have no idea how to get rid of. Eventually consumers will revolt and start disabling push notifications entirely.

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      1. Thanks, Kevin. I appreciate the opinion but disagree with the assessment on mobile ad networks like Airpush, Leadbolt, and others that basically try to do the same thing. If you don’t like ads (most people don’t) all ads are pretty much unwanted spam, but as they grow more efficient, and better-targeted, the ads may become more palatable as they become more profitable for publishers and advertisers. I look at things in the industry from a people-first standpoint. And I really think that the growth we’re seeing across the mobile landscape today is going to be beneficial to everyone in the long run – even mobile consumers who may presently view mobile ads as annoying or otherwise.

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      2. Kevin Fitchard Friday, December 28, 2012

        I can’t speak for Leadbolt, but there is a difference between Airpush and regular ad networks. Airpush hides within an app and once it starts sending you ads, there’s no way of detecting which app is actually pushing you the ads (You have to get special software to identify the culprits). Airpush ads are not only intrusive but they’re not transparent about who they’re coming from. In fact, Airpush seems to make a point of hiding which apps are pushing ads so consumers can’t take the obvious action of uninstalling their apps.

        If that’s the future of mobile advertising, then it doesn’t have a very promising future.

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